Thursday, March 20, 2008

Why the US needs a recession

That the US may "need" a recession is not a new idea. Some commentators say that the recession is "needed" in the sense that the laws of nature demand it. In particular, trade imbalances and overheated housing markets require "corrections." And Paul Farrell in MarketWatch lists "17 reasons America needs a recession," nearly all of which seem to be variations on "If all our problems get worse, maybe we'll finally do something about them."

But the real reasons that America needs a recession are far more subtle. Here they are:

Americans are working too hard. A recession makes jobs scarce, so there is less work to do. This reduction in work will be especially beneficial for the investor peons of Wall Street, who reputedly sell their souls by working legendary 70-hour weeks and engaging in a culture of "boozing it up."

Americans work too fast. If the recession continues to deepen, you can expect to see further declines in productivity growth.

Americans spend too much money. Right before the recession came into view, the annual rate of personal consumption in America was 9.7 trillion dollars. That's way too much.

Americans have stopped believing in God and started believing in products whose production harms the environment. Watch the Reverend Billy exorcise the cash register at Victoria's Secret.

Americans earn too much money. Average per capita income is $46,000. That's enough money to support a child in Africa for about 136 years. Instead, they buy suburban homes at least 5 miles from work, buy gas to get to work, and pay for extensive medical treatments for health problems which started when they stopped walking to work.